US Economy Expands 1.5%, Inflation Remains Above Fed Target

The U.S. economy expanded at a sluggish 1.5% pace in the second quarter, according to the Commerce Department's latest report. This marks a deceleration from the 2.1% growth seen in the first three months of this year.

Consumer spending, however, remained robust, increasing at a 3.2% annual clip, up from 0.5% in the January-March period.

The Commerce Department's preferred measure of inflation, the personal consumption expenditures (PCE) price index, rose 3.7% last month from June 2025, but remained above the Federal Reserve's 2% target for the fifth consecutive year.